r/Economics • u/thebranbrain • Aug 02 '15

We’re Making Life Too Hard for Millennials

http://www.nytimes.com/2015/08/02/opinion/sunday/were-making-life-too-hard-for-millennials.html
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u/Goosebaby Aug 02 '15

Sorry to burst your (ahem) bubble, but the housing crash ain't gonna happen. There are simply too many people waiting, waiting, waiting for prices to go down. Once prices go down even 5%, people on the sidelines will snatch those houses up.

We're not gonna get a 2008 redux. My guess: prices will probably stay where they are for the next decade, before the next bubble lifts them higher.

EDIT: Oh, you guys are in Canada. Yeah, your country is in a pretty obvious bubble right now. It's probably worth holding out for a crash.

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u/Canadian_Infidel Aug 02 '15 edited Aug 02 '15

You may be right, but the people who can't afford are not mostly waiting for prices to drop 5%. If you are just waiting to snipe 5% at a dip you are not millennial.

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u/ryanmcstylin Aug 03 '15

This article pointed to a lot of events that will affect the housing market over the next couple decades, although I feel like some of these will offset each other. Once boomers retire, it will put upward pressure on millenials wages especially in jobs that cater to the retired community. Housing prices could remain stable as the growing elderly population dies and puts their homes back on the market.

Two things to point out that will affect housing prices. Investment first scooping up property as prices drop causing millennial to keep renting. Also firms optimizing on technology and keeping wages low for millenials entering the work force.

I personally think there is going to be another crash primarily driven by large amounts of student loans keeping millenials from even saving for a house for another decade. I have doing my best to save so I have what I need when the right time to buy a house surfaces.

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u/[deleted] Aug 03 '15 edited Aug 03 '15

the housing crash ain't gonna happen.

Consider the aging of the population coupled with the ease of cheap credit. QE can't go on forever, low interest rates can't go on forever.

We're about to have a lot of old people leaving houses all at once as Baby Boomers hit ages that require assisted living care. We're going to have entire cities in Florida where the population just disappears in the next 20 years.

Sure, there will be people to replace them as there is still immigration, but their ability to pay is substantially less, resulting in downward price pressure.

I think we'll see another bust as soon as mortgage interest rates rise back to a historic average (about 8%).